Warning

Drill Down: Is CMS is “Taking a Break” From the RACs?

Every relationship has its ups and downs, and on February 3, 2014, the Centers for Medicare & Medicaid Services (CMS) and its RACs appear to be going through a rough patch. This relationship is clearly having issues, and in its recent rulings CMS is sending the signal that it may want to take a break and slow things down with its RAC partnerships. As we approach Valentine’s Day, this may be a typical move to get out of buying your significant other a present, but as far as CMS and the RACs as concerned, it may be time to evaluate things.

Trouble has been brewing in recent months, and on February 3, 2014, the American Coalition for Healthcare Claims Integrity, representing RACs and other health payment contractors working for government agencies, sent a letter to members of Congress asking for reform of the administrative law judge process and to oppose further efforts to restrict the RAC program.CMS has delayed once again the enforcement of the two-midnight rule, under which it would not reimburse under Part A for inpatient-level services provided to Medicare beneficiaries for treatment that does not span two midnights. This delay is now extended until October 2014. CMS considers short stays to be payable as outpatient services. The American Hospital Association (AHA) and American Medical Association (AMA) argue that this policy undermines medical judgment, does not give enough time to restructure software systems, policies, and procedures, and financially burdens providers.

On the other hand, the contractors’ association states that suspending the administrative law judge process and delaying the two-midnight rule has substantially shut down the RAC program, and in the February 3 letter to members of Congress, the association implied that CMS has stopped the entire RAC program. In regards to the two-midnight rule delay policy, “CMS is also continuing to suspend Medicare auditing by the Recovery Audit Contractor program,” the letter stated.

In its letter to Congress, the American Coalition for Healthcare Claims Integrity states that RACs audit only 2 percent of Medicare billings and find errors in nearly half of them, and delays in the two-midnight rule will cost the Medicare Trust Fund more than $4 billion. “Last year, Medicare lost more than $35 billion to waste, fraud and abuse. The willingness of CMS to suspend the most effective Medicare integrity initiative in U.S. history in the face of this astounding volume of waste is unconscionable.”

In its letter to Congress, the association advises to immediately reinstate auditing, with these guidelines:

“For Medicare admissions prior to Oct. 1, 2013, RACs will audit according to the old rule in effect at the time of service.

“For Medicare admissions between Oct. 1, 2013 and Sept. 30, 2014, RACs will audit according to the old and new two-midnight rule, apply the rule that favors the hospital while still identifying improper payments for the Trust Fund.

“For Medicare admissions after Oct. 1, 2014, RACs will audit according to the new rule.”

The AHA issued the following statement after CMS extended the two-midnight rule delay: “We are pleased that CMS has extended its enforcement moratorium on the two-midnight policy for an additional six months, as the AHA has urged. This action clearly recognizes that there are still many unanswered questions about the policy. At the same time, we continue to urge CMS to fix the critical flaws of the underlying policy by immediately engaging stakeholders to find a workable solution that addresses the reasonable and necessary inpatient-level services currently provided by hospitals to Medicare beneficiaries that are not expected to span two midnights.”

So is CMS telling the RACs “it’s not you, it’s me,” or more like, “it is you, after all”? Judging from approved issues still being posted to RAC contractors’ websites, this relationship still has hope.

Speech Generating Devices - Jurisdiction A - Potential incorrect billing occurred when claims for speech generating devices were billed without an indication supporting Medical Necessity as described in the NHIC Local Coverage Determination (LCD) L11534 and related article (A33770).

RAC Region C Connolly

DME

CPM billed for patients who have not received a total knee replacement - C004802013 - Continuous Passive Motion devices are only covered 21 days after a total knee replacement. Claims will be reviewed to determine if overpayments exist where the patient did not receive a total knee replacement.

Negative Pressure Wound Therapy Pumps - C004792013 - Negative Pressure Wound Therapy Pumps are considered medically necessary when payer specific guidelines are met. Medical documentation will be reviewed to determine if the billing of Negative Pressure Wound Therapy Pumps and associated supplies were reasonable and necessary and if documentation guidelines have been met.

Medical Necessity: Sacral Nerve Stimulation For Urinary Incontinence – IP - Effective January 1, 2002, Medicare covers sacral nerve stimulation for the treatment of urinary urge incontinence, urgency-frequency syndrome, and urinary retention. Sacral nerve stimulation involves both a temporary test stimulation to determine if an implantable stimulator would be effective and a permanent implantation in appropriate candidates. Both the test and the permanent implantation are covered. Medical documentation will be reviewed to determine if the sacral nerve stimulator was necessary for the patient.

Medical Necessity: Sacral Nerve Stimulation For Urinary Incontinence - OP -C003982013 - Effective January 1, 2002, Medicare covers sacral nerve stimulation for the treatment of urinary urge incontinence, urgency-frequency syndrome, and urinary retention. Sacral nerve stimulation involves both a temporary test stimulation to determine if an implantable stimulator would be effective and a permanent implantation in appropriate candidates. Both the test and the permanent implantation are covered. Medical documentation will be reviewed to determine if the sacral nerve stimulator was necessary for the patient.

Physician

Medical Necessity: Sacral Nerve Stimulation For Urinary Incontinence – Carrier - Effective January 1, 2002, Medicare covers sacral nerve stimulation for the treatment of urinary urge incontinence, urgency-frequency syndrome, and urinary retention. Sacral nerve stimulation involves both a temporary test stimulation to determine if an implantable stimulator would be effective and a permanent implantation in appropriate candidates. Both the test and the permanent implantation are covered. Medical documentation will be reviewed to determine if the sacral nerve stimulator was necessary for the patient.

About the Author

Dr. Margaret Klasa is the medical director for Context4 Healthcare. She is responsible for the company’s business knowledge discovery unit for medical context as it relates to the daily development of data products and software for medical claims editing and coding, with an emphasis on clinical and regulatory guidelines for Medicare, Medicaid and commercial payers.